Banking cash splash driving Maritime Silk Road development

Chinese banks are being encouraged to help Xiamen in Fujian province become a strategic pivot city in the 21st Century Maritime Silk Road initiative.

The China Banking Regulatory Commission’s wants banks to back infrastructure construction including ports, railways, highways and airports.

Head of the regulator's Xiamen office, Zhang Xintan, said the infrastructure was vital to build connections with countries along the route of the initiative.

Under the guidance of the regulator, banks in the city are already supporting industry leaders to go overseas to work on engineering, metal smelting and power plant operation projects. They are also pushing the implementation of key foreign projects in Xiamen. For example, Bank of China’s Xiamen branch supported IOI Group, a global integrated palm oil player in Malaysia, to invest $710 million in palm oil processing in Xiamen.

As of the end of the third quarter in 2016, the banking sector in Xiamen provided finance totaling 68.4 billion yuan ($9.9 billion) to support construction along the route of the 21st Century Maritime Silk Road. The volume of finance increased by 10.7 percent from the beginning of this year.

China Development Bank's Xiamen senior executive Zhou Shulin highlighted both the economic and social benefits of supporting green development in relevant countries.

CDB provided loans of $470 million to China Huadian Corporation for the construction of a power plant on the island of Bali, a popular tourist destination in Indonesia. The project used the company's latest environmentally-friendly power generating units, limiting emissions of sulfur dioxide, smoke dust and nitrogen oxide to well below Indonesia's national standards. It also reduced the pollution of a large power plant in a nearby area by building a fully enclosed circular coal yard.

So far, CDB has extended project loans of $2.7 billion to support the construction of 11 power plants in Indonesia. The installed capacity of these power plants exceeded 6 million kilowatts, accounting for about 10 percent of the total in that country.